Corporates rush to US high-yield bond market

May 08, 2013|Reuters

By Rachelle Kakouris

May 8 (IFR) - High-yield rated corporates are rushing toissue debt on Wednesday, with two deals priced and another ninepotential borrowers expected to take advantage of record lowrates, as junk bond yields dropped below 5% for the first time.

Bway Corp, a manufacturer of metal and plasticcontainers, announced talk of 10% all-in yield (PIK 9.75% / cash9%) and an issue price of 99.00 for its planned USD250m in4.5-year non-call one senior PIK toggle notes, rated Caa2/CCC+.BAML, Goldman Sachs, Deutsche Bank and JP Morgan are jointbookrunners on the trade, which will be used to pay shareholderdividends.

Iracore International is out with price talk on a USD125m(upsized by USD15m) five-year non-call 2.5 senior secured notesoffering. Pricing is expected later today around guidance of9.5% to 9.75% via Jefferies sole books.

Luxury homebuilder Toll Brothers is out with aUSD100m reopening of its SEC-registered 4.375% April 2023 dealvia Citi, Deutsche Bank, RBS and STRH. Pricing is expected thisafternoon around talk of 4% area.

CHC Helicopter, a provider of air transport tothe offshore oil and gas industry, is returning to thehigh-yield market to sell USD250m in senior eight-year non-callthree senior notes, in order to repay existing debt. The Caa1/B-rated deal is expected later today around talk of 9.5% area viaMorgan Stanley, HSBC, RBC and RBS.

First Quality Finance Company issued price talk of 4.75%area on its USD500m eight-year non-call three senior notesoffering, rated B2/BB-.

Northern Oil & Gas announced a USD200m add-on to itsSEC-registered 8% senior notes due 2020. The deal is expected toprice this afternoon around talk of 105.0-105.25. RBC, BMO andSTRH are leads.

Seminole Hard Rock Entertainment is also a possiblecontender for today. The owner and operator of franchisesincluding the Hard Rock Cafe is currently marketing USD350m ineight-year non-call three senior notes. BofA Merrill and CreditSuisse are joint bookrunners.

Cash America International, which operates more than1,000 US pawn shops, has launched a US300m (upsized fromUSD200m) five-year senior bullet notes to reduce revolvingcredit indebtedness. Pricing is expected today around a yield of5.75% from talk of 5.75% area via Jefferies and JMP.

Away from today's potential pricings, offshore contractorPacific Drilling announced today that it will embark onan investor roadshow next week to market USD750m in seniorsecured notes due 2020 (7NC3). Goldman Sachs is lead leftbookrunner, while Citi, Deutsche Bank and Barclays are jointbookrunners. Proceeds, along with a new term loan, will be usedto repay existing borrowings under the project facilitiesagreement and the balance for GCP.

Brunswick Corporation announced a USD150m eight-yearnon-call three senior notes offering expected to be ratedBa3/BB. The issuer is expected to commence an investor roadshowtoday for pricing May 10 via JP Morgan/BofA Merrill//MorganStanley/RBC/USB.

The yield-to-worst on the Barclays US Corporate High YieldIndex closed Tuesday at 4.97%, breaking through the 5% barrierfor the first time in the index's 30-year history.